US-Chinese Textile Negotiations Break Down

US and Chinese trade negotiations once again have failed to reach agreement on a comprehensive
textile trade agreement, and the two sides seem to be further apart than ever. An impasse has been
reached on the duration of any agreement, the rate of quota growth and the base that would be used
in determining quota growth. The United States is pressing for an agreement that would extend until
2008, when the authority to use a safeguard mechanism to impose quotas when there is market
disruption expires. The United States reportedly is willing to permit annual growth of 10 to 14
percent, while on the other hand, China wants an agreement modeled after one it reached earlier
this year with the European Union. That agreement runs only through 2007, and calls for quota
growth limits of 8 to 12 percent.

As the talks broke down, US Special Textile Negotiator David Spooner said, We have not come
to an agreement that meets the needs of our domestic manufacturers and retailers. He said the
overall goal of the United States is to reach a longer-term solution that will permit greater
stability in textile and apparel trade. He noted the US government has been using its rights under
China’s World Trade Organization accession agreement to invoke safeguards in cases of market
disruption or the threat of market disruption and we will continue to do so as appropriate.

A coalition of US textile and apparel manufacturers and labor, which has filed more than
two-dozen safeguard petitions, commended the US textile negotiators for their continuing efforts to
reach a fair agreement, while claiming that China’s continuing intransigence makes it increasingly
difficult to reach an agreement before the end of the year. Cass Johnson, president of the National
Council of Textile Organizations, said China has returned to a position of delay and no compromise
by insisting on terms of an agreement that were impossible for the US government to accept. Auggie
Tantillo, executive director of the American Manufacturing Trade Action Coalition, charged that
China’s failure to negotiate reasonably ensures there will be an atmosphere of uncertainty for
anyone seeking to import textile goods into the United States.

Both textile manufacturers and importers have been hoping for an agreement that would reduce
that uncertainty, but at the moment that appears to be out of reach, and no date has been set to
resume negotiations.

October 2005